President to Punish BP with $.1 tax

If you haven't seen this video of the oil leak...it may make you sick!

Oil companies face an immediate tax rise of 1 cent per barrel to help to pay for the clean-up in the Gulf of Mexico under proposed legislation rushed out by the White House yesterday.

The measure, unveiled as BP began a new attempt to contain the ruptured well that has leaked millions of gallons of crude oil into America’s southern coastal waters, would put an extra $500 million (£340 million) over ten years into the Oil Spill Liability Trust Fund, which covers damage caused by such disasters.

Under a $118 million spending plan outlined in the package, people affected by the spill — such as fishermen who have lost their livelihoods because of the contamination — will be granted financial assistance, and federal agencies will get additional funds to monitor the slick and assess its impact.

President Obama, said by a spokesman to be “deeply frustrated” that the leak has still not been plugged three weeks after it erupted, intends that BP will pick up most of the cost of his new plan.

Hearings into the incident aboard the Deepwater Horizon drilling rig on April 20 continued yesterday in Louisiana and in the US Congress, where Democrat Henry Waxman blamed a “calamitous series of equipment and operational failures” for the disaster. “If the largest oil and oil services companies in the world had been more careful, 11 lives might have been saved and our coastlines protected,” he said.

The way BP and its partners responded to the disaster, which began with an explosion aboard the Deepwater Horizon on April 20, will also be a matter for investigation.

Survivors have alleged that, after being rescued, they were held at sea while the rig’s owner, Transocean, assembled its lawyers. After being brought ashore, traumatised and exhausted by two nights without sleep, they claim that they were taken to a hotel and “coerced” by Transocean representatives into signing liability waivers before being allowed to see their families.

According to Steven Gordon, of the Houston legal firm Gordon, Elias and Seely, the waivers are now being used against the workers as they attempt to seek compensation for emerging psychological problems that have left some too afraid to work at sea again.

“These people went through holy hell. They have probably just gone through the most traumatic period of their entire lives. They needed counselling — not ‘Please sign here that you’re not hurt’ ,” said Mr Gordon, who is representing Christopher Choy, a rig worker. “When they asked him to sign this, he hadn’t been allowed to sleep and have his first nightmare.”

Mr Choy, 23, teamed up with a firefighter on the rig to try to rescue a crane operator who was trapped by the fire. “They couldn’t get to him because he was in flames. These guys watched their friends burning,” Mr Gordon told The Times.

Alwin Landry, the captain of a cargo ship that was moored alongside the rig, told a hearing in New Orleans that mud began pouring down on him “like a black rain”, followed by a thunderous hiss. “I saw the green flash on the main deck. Time kind of slowed down. I heard the explosion,” he said, adding that minutes later came a radio call: “Mayday! Mayday! Mayday! The rig’s on fire. Abandon ship.”

Workers leapt eight storeys into the sea to escape the flames, but even the water was on fire. The last to climb from the rig on to Mr Landry’s boat was the rig’s captain, Curt Kuchta, who tried to hit the “kill” switch to shut the oil well. “He acknowledged he pressed it and didn’t know if it worked or not,” Mr Landry said.

19th Straight Month of Budget Deficit

It was more than twice the $40-billion deficit that Wall Street economists surveyed by Reuters had forecast and was striking since April marks the filing deadline for individual income taxes that are the main source of government revenue.

Department officials said that in prior years, there was a surplus during April in 43 out of the past 56 years.

The government has now posted 19 consecutive monthly budget deficits, the longest string of shortfalls on record.

For the first seven months of fiscal 2010, which ends September 30, the cumulative budget deficit totals $799.68 billion, down slightly from $802.3 billion in the comparable period of fiscal 2009.

Outlays during April rose to $327.96 billion from $218.75 billion in March and were up from $287.11 billion in April 2009. It was a record level of outlays for an April.

Department officials noted there were five Fridays in April this year, which helped account for higher outlays since most tax refunds are issued on that day.

But for the first seven months of the fiscal year, outlays fell to $1.99 trillion from $2.06 trillion in the comparable period of fiscal 2009, partly because of repayments by banks of bailout funds they received during the financial crisis.

Receipts in April -- mostly from income taxes -- were $245.27 billion, up from $153.36 billion in March but lower than the $266.21 billion taken in during April 2009.

Receipts from individuals, who faced an April 15 filing deadline for paying 2009 taxes, fell to $107.31 billion from $137.67 billion in April 2009.

The U.S. full-year deficit this year is projected at $1.5 trillion on top of a $1.4 trillion shortfall last year.

White House budget director Peter Orszag told Reuters Insider in an interview on Wednesday that the United States must tackle its deficits quickly to avoid the kind of debt crisis that hit Greece.

NKorea Claims Fusion

SEOUL, South Korea — North Korea claimed Wednesday that its scientists succeeded in creating a nuclear fusion reaction, but experts doubted the isolated communist country actually had made the breakthrough in the elusive clean-energy technology.

Fusion nuclear reactions produce little radioactive waste — unlike fission, which powers conventional nuclear power reactors — and some hope it could one day provide a virtually limitless supply of clean energy. U.S. and other scientists have been experimenting with fusion for decades, but it has yet to be developed into a viable energy alternative.

North Korea's main newspaper, however, reported that its own scientists achieved the feat on the occasion of the "Day of the Sun" — a North Korean holiday marking the birthday of the country's late dynastic founder, Kim Il Sung, in April.

Often, North Korea's vast propaganda apparatus uses the occasions of holidays honoring Kim or his son, current leader Kim Jong Il, to make claims of great achievements that are rarely substantiated.

North Korean scientists "solved a great many scientific and technological problems entirely by their own efforts ... thus succeeding in nuclear fusion reaction at last," the Rodong Sinmun newspaper said in a report carried Wednesday by the North's official Korean Central News Agency.

Experts, however, doubted the North's claim.

"Nuclear fusion reaction is not something that can be done so simple. It's very difficult," said Hyeon Park, a physics professor at Postech, a top science and technology university in South Korea.

Park, who conducts fusion research in South Korea, said the North may have succeeded in making a plasma device and produced plasma, a hot cloud of supercharged particles — only one preliminary step toward achieving fusion.

He said outside experts need to know the scale of the experiment and method of generating plasma to assess the details of the North's claim.

South Korea is one of a seven-nation nuclear fusion consortium to build the International Thermonuclear Experimental Reactor, or ITER in Cadarache in southern France by 2015. Other members include China, the European Union, Japan, Russia, India and the U.S.

The aim of ITER is to demonstrate by 2030 that atoms can be fused together inside a reactor to efficiently produce electricity. Current forms of nuclear power do the opposite, harnessing the energy released from splitting atoms apart.

A South Korean official handling nuclear fusion at the Ministry of Education, Science and Technology said the North appeared to have conducted only a basic experiment.

The official said the fusion has nothing to do with making nuclear bombs and said he could not make any further comment. He asked not to be identified because he was not authorized to speak to media.

All of North Korea's nuclear projects are of intense concern because of worries the country is building its arsenal of atomic weapons. Pyongyang conducted two nuclear weapons tests in 2006 and 2009, drawing international condemnation and U.N. sanctions.

Energy-starved North Korea has said it would build a light water nuclear power plant. Ostensibly for civilian electricity, a nuclear power plant gives North Korea a premise to enrich uranium, which at low levels can be used in power reactors but can also be used in nuclear bombs.

Texas Entertains Legalizing Gambling to Make Up Budget Woes

An expansion of gambling has been suggested as Texas faces a projected shortfall that some lawmakers say could hit $18 billion.

Republican Speaker Joe Straus told House budget writers Tuesday that they'll have to handle a state shortfall of at least $11 billion without new taxes, but he raised the possibility of unpaid furloughs and four-day workweeks for state workers.

"Increasing taxes would restrain economic growth and hinder our ability to create jobs," Straus said at a meeting of the House Appropriations Committee. "Come next session, I'm confident that we can make thoughtful, responsible decisions to balance our budget, but this will require tough choices, significant cuts in some areas and perhaps totally new thinking in others."

Texas' current budget is more than $182 billion in state and federal dollars. The biggest chunks of spending are on education and health care.

The budget shortfall, which officials said Tuesday could be as high as $18 billion, is largely a result of the national recession. It's the projected difference between available revenue, mostly from lower-than-expected sales taxes, and the cost of maintaining services at their current levels. The state's Rainy Day Fund is expected to have a balance of about $8.2 billion.

"Because so much of our general revenue budget goes to personnel, I hope that you will find creative ways to contain personnel costs and limit payroll growth," Straus told the committee. "You might consider the impact of freezing higher-level salaries or limiting new hires to only those essential to the public safety and welfare of our citizens."

He said Texas must look at what other states are doing to handle budget shortfalls, including unpaid furloughs and four-day workweeks.

Straus also mentioned imposing a moratorium on all new programs and services that require state money and a prohibition on issuing state bonds because of the ongoing cost associated with debt.

"I'm not advocating for any one of these choices, in particular, but I do know that every cost savings idea must be on the table."

Later during the meeting, committee Chairman Jim Pitts, R-Waxahachie, said legalized gambling would be a possible option.

"I just tell it like it is," he said. "It will be helping us in the future and with what we've heard today we will continually be needing revenue in the state of Texas."

Lt. Gov. Dewhurst and Gov. Rick Perry both say they oppose any expansion of gambling in Texas.

Dewhurst, who presides over the Senate, spent his first session in the office facing a $10 billion budget shortfall in 2003.

"This is not my first rodeo," Dewhurst told The Associated Press Tuesday. "I went through it in 2003 and it was a lot tougher in 2003 than it's going to be in 2011. Our challenge in 2011 is to cover the dollars that went into the 2009 budget from the federal stimulus and the previous balances that we used, plus any shortfalls that we have in our revenue estimate.

"I think we're in pretty good shape," he said.

Dewhurst said with more money in the Rainy Day Fund, axing one-time items that were funded in 2009, payments from the state's Available School Fund that were not available last year and improvement in the economy would help ease the pain.

Dewhurst did agree with Straus' assessment that the federal health care overhaul will only exacerbate the state's budgetary woes.

"Over the next few years, Texans will face higher federal income taxes and other increases in federal levies, including for Social Security and Medicare as result of the federal health care reforms," Straus said. "Our work on the budget will begin in an environment of uncertainty as the federal government grapples with spending and tax measures to reduce the federal debt. This makes it even more imperative that the state of Texas cover its budget shortfall without a tax increase."

State agencies have submitted proposals to cut current-year budgets by 5 percent at the behest of Perry, Dewhurst and Straus. But those savings will only amount to about $1.7 billion, officials have said.

"The 5 percent that we requested was just the beginning," Straus said. "It was absolutely necessary but not nearly sufficient."

US Adds 290K Jobs...Jobless Rate Increases?

US employment grew at the fastest pace in four years in April as private sector businesses ramped up hiring, showing the labor market recovery picking up steam.

Employers added 290,000 jobs in April, the Labor Department said on Friday, far more than analysts had expected.

The department also revised figures for February and March to show 121,000 more jobs were added than previously thought.

The unemployment rate, however, rose to 9.9 percent as discouraged workers re-entered the labor force to look for work.

"While today's report clearly suggests that we are moving in the right direction, it also shows how much work remains to be done," said Christina Romer, head of the White House Council of Economic Advisers.

"It will take many months of robust job growth to restore the labor market to genuine health. Further targeted actions to spur private sector job creation are critically needed to ensure a more rapid, widespread recovery," she said in a statement.

Stubbornly high unemployment has been a political sore spot for President Barack Obama and his fellow Democrats, even though the job market is showing increased vigor.

Analysts polled by Reuters had expected nonfarm payrolls to rise 200,000 last month and the jobless rate to remain unchanged at 9.7 percent.

The median forecast from the 20 most accurate forecasters was for a payrolls increase of 188,000.

"I think we are moving into this very reassuring range of strong employment growth. It is consistent with the way the economy is going," said Kurt Karl, chief U.S. economist at Swiss Re in New York.

U.S. stock index futures held gains after the report, while Treasury debt prices extended losses. The U.S. dollar trimmed losses versus the the euro and rose against the yen.

Private sector employment increased 231,000, also the largest gain since March 2006, after rising 174,000 in March. Private payrolls have now grown for four months. Census hiring contributed 66,000 jobs.

Analysts had expected private employment to rise between 50,000 and 100,000 in April.

Data ranging from manufacturing to consumer spending have pointed to a pick-up in the recovery from the U.S. economy's longest and deepest downturn since the Great Depression.

"The trend is improving," said Zach Pandl, an economist at Nomura Securities International in New York. "The economic recovery is gaining momentum."

But public disenchantment over the economy, especially the labor market, is damaging Obama's popularity. His fellow Democrats face a tough fight in congressional elections in November, with their majority status at stake.

Republicans say Obama's policies—including a record economic stimulus package—have failed to deliver on their promise of reducing the jobless rate, which is expected to still be painfully high when elections rolls around.

About 8.2 million jobs were lost during the recession and economists warn it is likely to take years to regain that lost employment.

U.S. consumers have begun to participate in what has been a manufacturing-led recovery, but job growth is crucial to sustaining that trend.

Last month, manufacturing payrolls increased 44,000 after rising 19,000 in March. Construction employment gained 14,000, rising for a second month and defying expectations of a fall.

Payrolls in the service sector increased 166,000, advancing for a third month. Temporary help hiring increased 26,200, strengthening the jobs recovery theme. Temporary employment is seen as a precursor to full-time jobs.

Government payrolls rose 59,000, adding onto the prior month's 56,000 increase. The average workweek rose to 34.1 hours from 34 hours in March.

SCOTUS Pick Coming

DRIVING NEXT WEEK -- Look for President Obama to name his Supreme Court pick Monday, and look for it to be Solicitor General Elena Kagan, a former Harvard Law dean. The pick isn’t official, but top White House aides will be shocked if it’s otherwise. Kagan’s relative youth (50) is a huge asset for the lifetime post. And President Obama considers her to be a persuasive, fearless advocate who would serve as an intellectual counterweight to Chief Justice Roberts and Justice Scalia, and could lure swing Justice Kennedy into some coalitions The West Wing may leak the pick to AP’s Ben Feller on the later side Sunday, then confirm it for others for morning editions. For now, aides say POTUS hasn’t decided, to their knowledge.

Pakistani Taliban Expands Ambitions

Suspected in the attempted bombing of Times Square, the Pakistani Taliban has teamed up with a number of militant groups, including al Qaeda, to expand its influence in recent years, experts say. “They trade bomb makers and people around,” a senior U.S. intelligence official told The New York Times. “It’s becoming this witches’ brew.” The expanded cooperation means that the Taliban, concerned chiefly with territorial battles in Pakistan, may be becoming more threatening to targets abroad even while its overall power and influence is on the wane thanks to U.S. and Pakistani efforts to attack their base of operations. Tribal areas in Wazirstan can be used for terrorist training camps, where alleged Times Square bomber Faisal Shahzad may have trained. The Taliban initially took credit for the bombing attempt, but since then has reversed course and denied any links to Shahzad.

Oil Starts to Wash Up on Coast

Coastguards have confirmed that oil is washing up on the US shoreline for the first time after the BP rig disaster.

Teams tackling the crisis in the Gulf of Mexico reported the presence of oil on a beach of an outlying island off Louisiana.

Oiled birds including gannets and brown pelicans have been found on the Chandeleur Islands.

"We have teams that have confirmed oil on the beach, at the south end of the Chandeleur Islands, at Freemason Island," coastguard Connie Terrell said.

"This is the first confirmation that Unified Command has received of oil on a shoreline," she added.

"It's largely just sheen, there is no evidence of medium or heavy oil," Ms Terrell said.

BP spokesman John Curry said three emergency response teams had been sent to the island, 30 miles off the mainland.

Inflatable booms to try to protect the prime marsh and wildlife area were being deployed, Mr Curry said.

"We are doing everything we can to make sure a major impact doesn't happen," Mr Curry said.

The Chandeleur Islands form the easternmost point of Louisiana and are part of the Breton National Wildlife Refuge.

They are the second oldest refuge in the United States and home to countless endangered shorebirds.